Global Market Highlights
The DJIA rose by +0.17% on Tuesday (07/11), followed by S&P500 (+0.28%) and Nasdaq (+0.90%). Wall Street continued its solid gains, supported by the decline in the UST 10Y yield to 4.58% and investors responding positively to the earnings releases of companies in 3Q23. Today, the market will be looking toward several data releases such as: 1) US API Crude Oil Stock Change Nov-23; 2) Germany Inflation Rate YoY Final Oct-23; 3) EU Retail Sales MoM Sep-23.
Domestic Update
Bank Indonesia (BI) reported reserve assets in Oct-2023 at USD133.1 billion. MNCS Comment: The reserve assets position decreased from the Sep-2023 realization of USD134.9 billion, due to the needs for foreign debt payments by the government and interventions to stabilize IDR. In the future, we expect reserve assets to remain relatively stable after the BI7DRR increased to 6.0%, making exchange rate intervention manageable. On the other hand, market expectations of The Fed ending its interest rate hike cycle could be a positive catalyst.
Company News
1. AGII IJ recorded a net profit growth of +57.7% YoY to IDR111.0 billion in 9M23 (vs IDR 70.4 billion in 9M22) (Emiten News). MNCS Comment: The increase in net profit is due to a +8.7% YoY rise in revenue to IDR2.1 trillion (vs IDR1.9 trillion in 9M22). In addition, margin expansion has driven profitability, with the company's GPM rising to 45.3% (vs 44.8% in 9M22). A decrease in financial expenses (-15.0% YoY) also provided cushion to the bottom line. Currently, AGII is traded at a level of 32.54x/1.28x PER/PBV.
2. MAIN IJ managed to report a net profit of IDR45.8 billion in 9M23, compared to a net loss of IDR 51.0 billion in 9M22 (Emiten News). MNCS Comment: We note that the turnaround was supported by a +7.2% YoY growth in revenue to IDR9.0 trillion (vs IDR8.4 trillion in 9M22). Effective efficiency and a decrease in input costs also aided the recovery of profitability, leading to increased margins. It is noted that the company's GPM/OPM increased to 8.3%/3.2% (vs 6.4%/1.1% in 9M22). Currently, MAIN is traded at a level of 19.42x/0.56x PER/PBV.
3. ARNA IJ has allocated IDR700 billion for the construction of 2 new plants (Emiten News). MNCS Comment: With the construction of new plants (4C & 6), we expect the company's capacity to increase to 78.2 million m2 by F26F. The addition of ARNA's new factories will also strengthen the high-end product segment and increase market share penetration by ~8%. It is hoped that this expansion will drive the company's future profitability. Currently, ARNA is traded at a level of 10.62x/2.84x PER/PBV.
IHSG Updates
The JCI weakened by -0.51% to 6,843.79 on Tuesday (07/11), followed by a net foreign sell of IDR419.99 billion. Most sectors experienced a decline, led by the cyclical consumer sector (-1.73%), followed by the energy sector (-1.35%). On the other hand, sectors that gained led by infrastructure sector (+0.40%), followed by the property sector (+0.38%). The index weakened along with the majority of Asian markets as investors were watching the release of domestic reserve assets data in Oct-2023, as well as the contraction in China's trade balance performance in Oct-2023, reflected by a decline in exports. The Rupiah closed lower at IDR15,630/USD. We estimate the IHSG will move within the price range of 6,763-6,845. Today's Recommendations: BMRI, CPIN, IPCC, MEDC.
Corporate Actions
IPO : RGAS (IDR120/share)
EGMS: SMBR
Cum Dividend : SICO (IDR2/share)
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